Sarepta Therapeutics Inc (NASDAQ:SRPT) is up by 16% this morning after the FDA informed the company that it needs additional time to complete the review of the New Drug Application for the company’s eteplirsen, which is an exon-skipping treatment candidate for Duchenne muscular dystrophy. Traders are buying the postponement because it wasn’t a rejection at this point. Many traders feared that the FDA would reject the drug because the briefing doc for eteplirsen highlighted problems related to Sarepta’s Study 201/202 trial, which some believed would render the study’s efficacy conclusion invalid. Apparently the FDA doesn’t feel that way, which increases the likely of the treatment being approved.
Is Sarepta Therapeutics Inc (NASDAQ:SRPT) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. These investors who are in the know are buying Sarepta. The number of long hedge fund bets in the stock rose by 2 in recent months. SRPT was in 19 hedge funds’ portfolios at the end of March. There were 17 hedge funds in our database with SRPT positions at the end of the previous quarter. At the end of this article we will also compare SRPT to other stocks including Infinity Property and Casualty Corp. (NASDAQ:IPCC), NuStar GP Holdings, LLC (NYSE:NSH), and Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) to get a better sense of its popularity.
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According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Perceptive Advisors, managed by Joseph Edelman, holds the largest position in Sarepta Therapeutics Inc (NASDAQ:SRPT). Perceptive Advisors has a $74.8 million position in the stock, comprising 6.6% of its 13F portfolio. The second most bullish fund manager is Steve Cohen of Point72 Asset Management, with a $57.8 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish encompass Ken Griffin’s Citadel Investment Group, Behzad Aghazadeh’s venBio Select Advisor, and Zach Schreiber’s Point State Capital.
On the next page we’ll look at some funds that took up positions in Sarepta during Q1, as well as compare the stock to a handful of others with similar market caps.
As one would reasonably expect, specific money managers have been driving the bullishness in Sarepta. Tourbillon Capital Partners, managed by Jason Karp, established the most outsized position in Sarepta Therapeutics Inc (NASDAQ:SRPT) during Q1. Tourbillon Capital Partners had $15.7 million invested in the company at the end of the quarter. Hal Mintz’s Sabby Capital also initiated a $9.9 million position during the quarter. The following funds were also among the new SRPT investors: Kevin C. Tang’s Tang Capital Management, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management, and Kenneth Mario Garschina’s Mason Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Sarepta Therapeutics Inc (NASDAQ:SRPT) but similarly valued. These stocks are Infinity Property and Casualty Corp. (NASDAQ:IPCC), NuStar GP Holdings, LLC (NYSE:NSH), Calumet Specialty Products Partners, L.P (NASDAQ:CLMT), and Sun Hydraulics Corporation (NASDAQ:SNHY). All of these stocks’ market caps are similar to SRPT’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 7 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $297 million in SRPT’s case. Infinity Property and Casualty Corp. (NASDAQ:IPCC) is the most popular stock in this table. On the other hand Calumet Specialty Products Partners, L.P (NASDAQ:CLMT) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Sarepta Therapeutics Inc (NASDAQ:SRPT) is more popular among hedge funds and has far more money invested in it. Considering that hedge funds are very fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.